Nova Scotia government’s free-spending approach presents opportunity for opposition parties

As we hit the midpoint of Nova Scotia’s 65th general assembly, the government’s finances are a mess. The Houston government has abandoned any pretense of fiscal responsibility—debt is sharply rising, there’s no plan to balance the budget, and the deficit seems to grow larger every time Premier Houston opens his mouth.

Consider Houston’s recent track record.

Just over a year ago, in its 2025 budget, the government projected a $697.5 million deficit for 2025/26. By mid-year 2025, that number had increased to over $1 billion. According to Houston’s latest budget released in February, the government will now run deficits averaging more than $1 billion until at least 2029/30. Moreover, Houston recently mused about a possible $2 billion deficit this fiscal year. The trend is obvious.

Why is this happening? Because Houston has increased spending at every turn since he took office in 2021. Clearly, the Conservatives in Nova Scotia have no interest in fiscal responsibility.

Herein lies an opportunity for Nova Scotia’s Liberals and New Democrats.

The first element of the opportunity is differentiation. Nova Scotians deserve better than three parties fighting over who can spend the most taxpayer money and deliver the largest government. Premier Houston has established his view on the matter, so there’s ample room for the opposition parties to outline a different tact.

Fiscal responsibility extends well beyond party labels in Nova Scotia. Each party has a recent history of balancing budgets. For the Liberals, Stephen McNeil (premier from 2013 to 2021) was a strong fiscal steward, holding spending growth below the rate of most of his recent peers and delivering a string of balanced budgets. For the New Democrats, Darrell Dexter, during his premiership (2009-2013), also held spending growth to low levels (on a per-person inflation-adjusted basis) and had planned for a balanced budget his last year in office.

Why should Nova Scotians care about fiscal responsibility?

Because massive deficit spending and the consequent spikes to debt today must be paid for down the road. According to Houston’s plan, provincial debt will roughly double, increasing by approximately $19 billion on his watch. Framed differently, his government will hand tomorrow’s taxpayers—including the next generation of Nova Scotians—$19 billion in new debt. Opposition parties could oppose this reckless spending, and the burden placed on younger Nova Scotians, by highlighting its fundamental unfairness. Any household or business that spent this way would go bankrupt, and many Nova Scotians would likely appreciate a different approach.

The benefits would be clear. In addition to reducing the burden on the next generation and reducing debt interest payments, which consume valuable tax dollars, spending restraint would allow more fiscal room to lower taxes. In fact, Allan MacMaster, Houston’s finance minister in 2024, said that tax relief was the “No. 1 ask” from Nova Scotians that year. This should be no surprise as Nova Scotians face some of the highest personal and business taxes in North America. Yet the government’s rapidly escalating debt means that tax hikes—not tax reductions—are more likely in the future. Again, opposition parties have an opportunity to sell Nova Scotians on a plan to restrain spending so they can lower tax rates and allow residents to keep more of their hard-earned money.

Finally, despite claims from some quarters, a fiscally responsible plan does not need to be draconian in nature. During his five years in office, Premier Houston has increased spending by 8.80 per cent on average each year. But if his government had simply held spending increases to the annual average rate of inflation-plus-population growth (5.48 per cent)—meaning no cuts, just restraint—total spending this year would be approximately $2.2 billion less than it is now, and the government would run a surplus, which would leave more fiscal room to cut taxes.

Nova Scotians are ready for an honest conversation about provincial finances. If the Houston government isn’t interested, here’s hoping the Liberals or New Democrats pick up the cause.